Corp-Ethics.com - Report: Inquiry into music downloading

Company	Sony [Company Info]
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Date	Issue	Title
3rd Mar 2006	Questionable Practice	Inquiry into music downloading

Report

The US Department of Justice is investigating allegations of price fixing by top music labels on their charges for digital downloading.

The inquiry mirrors an ongoing probe by New York attorney general Eliot Spitzer into what the industry charges firms such as Apple to sell music online.

Labels have been at loggerheads with Apple over what it charges for tracks sold through its iTunes online service.

None of the world's four largest music labels have commented on the inquiry.

The Justice Department did not give details about the scope of the inquiry or the companies being investigated.

"The antitrust division is looking at the possibility of anticompetitive practices in the music download industry," a Department of Justice spokeswoman said.

However, industry experts said the authorities would look into claims that music labels were colluding to fix wholesale prices for online retailers such as Apple.

The four major labels - Universal Music, Sony BMG, Warner Music and EMI - want Apple to vary the price of songs downloaded via its iTunes digital music store, which had more than 20 million users last year.

Apple has insisted on selling individual tracks for 99 cents in the United States.

Industry experts said companies expected to receive subpoenas in the coming weeks.

The digital music market has really taken off in the past couple of years, with revenues from digital sales topping the $1bn mark last year.

Its growth has come at a time when sales of CDs and other traditional music formats are falling.

Mr Spitzer launched his investigation into wholesale digital music pricing in 2004.

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